YouTube Inks Video Deal with Warner

Online video darling YouTube has signed its first commercial partnership with Warner Music Group which will enable YouTube to distribute music videos from Warner Music’s enormous artist roster (which includes stalwarts like Madonna and the Red Hot Chili Peppers and newcomers like Sean Paul) as well as artist interviews, behind-the-scenes footage, special content, and original Warner Music Group programming. And, in what might be the most interesting move, YouTube users will be able to incorporate Warner’s recoded music catalog into the videos they create and upload to YouTube.

“Partnering with Warner Music Group is one of the most significant milestones for our company and our community, and shifts the paradigm in this new media movement,” said Chad Hurley, CEO and Co-Founder of YouTube. “By providing a new distribution opportunity, we are paving the way for media companies to harness the vast financial potential of user-generated content on YouTube. We are thrilled that WMG had the vision to be the first music company, in partnership with its artists, to support the use of their content within user videos and to allow our community to interact with WMG music in new creative ways.”

Under the agreement, every Warner Music Group video cleared for Internet use will be available to YouTube, and artists will be able to have content removed from the YouTube site if they so request—up to this point, a significant proportion of music video content available via YouTube is uploaded in violation of copyright. However, YouTube plans to roll out a new content identification and royalty reporting architecture by the end of 2006 which will not only identify copyrighted content appearing on the site (through audio identification technology and other techniques) but will provide authors the ability to authorize and monetize the use of their work within user-generated video on the site. Thus, Warner Music Group could authorize content for use on YouTube, and receive royalties and advertising revenue from user generated mash-ups and videos which incorporate the content. (Hey: where else are you going to get permission to play with Madonna? Oh, um…nevermind.)

YouTube and Warner Music Group will also share advertising revenues from Warner videos distributed via the YouTube site.

YouTube is currently the darling of the user-generated video industry, and has been working with Warner for months, most recently to promote the release of a Paris Hilton “album.” However, the company is drawing an increasing amount of fire over copyright infringement, most recently from Universal Music Group, which characterized YouTube and social networking site MySpace as major infringers which owe music labels tens of millions of dollars.

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